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ACCA Strategic Professional · Advanced Taxation (UK) · Capital gains tax: the use of exemptions and reliefs in deferring and minimising tax liabilities

Under the rates in the ATX-UK tax tables (Finance Act 2025), what is the rate of interest charged on underpaid tax, which would apply if an individual pays a capital gains tax liability after the due date?

Interest on underpaid tax, including late-paid capital gains tax, runs at 8.50% under the ATX-UK tables. The 3.50% rate applies to overpaid tax, and the 3.75% official rate relates to beneficial loans, so neither applies to a late CGT payment.

  1. A3.50%
  2. B3.75%
  3. C8.50%Correct
  4. D10.00%

Explanation

The tax tables give 8.50% as the rate on underpaid tax. 3.50% is the rate on overpaid tax, which HMRC pays to the taxpayer. 3.75% is the official rate of interest used for beneficial loans, not late tax. 10% is the annual rate used for the daily VAT penalty, not interest on CGT.

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